Equity release market booms as older homeowners cash in
Equity release lending for the second quarter was almost £1bn (£971m), the highest quarterly total ever reached by the sector, said the Equity Release Council.
And it shows no sign of stopping, according to experts in the market.
Dean Mirfin, chief product officer at Key Retirement, said: “The quarterly growth trend of 10% plus is very likely to continue and, whilst surpassing £1bn of quarterly lending will be an important milestone, what is more significant is the ongoing growth in consumer demand, up by 27% year-on-year.
“This suggests that we will see the market reach well over £4bn by year end. Using property wealth is now a recognised later life funding solution and there’s a growing gifting trend, too.
“Around 28% of retired homeowners used some or all of the money for gifts for families compared with 23% in the first six months of 2017.
He added that customers are enjoying low rates in a very competitive market, with lifetime fixed rates on a par with or lower than many mainstream lenders’ variable rates.
Steve Wilkie, managing director of Responsible Equity Release, added: “Historically, equity release has been driven by homes and holidays; with two thirds of our customers naming improvements to the home and a third listing holidays as the main usage.
“Whilst these items are still close to the top of the list, customers are also choosing to plan ahead and invest into their family’s futures. They are looking at the gifting of an early inheritance at a time when it’s needed the most and where the whole family can reap the rewards later.”